May 26, 2024

Brighton Journal

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Historic decline in Chinese stocks after Xi Jinping was recognized as head of government

Historic decline in Chinese stocks after Xi Jinping was recognized as head of government

For its part, the yuan fell as much as 0.7% to 7.2782 per dollar, approaching a record low seen last week. Meanwhile, the Hang Seng index fell 6.4% on Monday. It marked the biggest one-day decline since the global financial crisis in 2008.

“The gauge closed at its lowest level since April 29, 2009. Shares in mainland China also fell, but the benchmark CSI 300 index fell 2.9% and the Shanghai Composite fell 2%”, The WSJ promised.

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Investor concern

Chinese markets weakened after the Congress It ended with the reorganization of the Economic Policy Committee of the Communist PartyInvestors expressed disappointment in Xi Jinping’s new leadership.

Among investors’ biggest fears is that Xi Jinping’s “public prosperity” and the role of state-owned enterprises will begin to play a central role..

Investors were disappointed when Xi defended his policy at last week’s congress and stopped short of propping up property markets. The onshore yuan fell to its weakest level in 14 years and the CSI 300 fell in all but one session last week.

Another indicator of the market’s discontent was a 17.9 billion yuan ($2.5 billion) exodus by foreign investors from the domestic stock market through the Stock Connect channel.

While markets will see some initial support this week in renewed political confidence, public sentiment will remain cautious as investors wait for third-quarter growth data, which was abruptly delayed last week.

According to a report from Goldman Sachs Hong Kong newspaper South China Morning Post quoted, Investors’ concern may be due to the “absence of recognized market-oriented economic reformers”. Of the seven members of the new Politburo Standing Committee, the all-powerful ruling body of the CCP.

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